The Kansas Supreme Court on Friday dealt a blow to what’s known as dark story theory, an idea used by big box retailers to reduce their property taxes. The decision reversed a previous ruling in favor of Walmart’s argument that its properties in Johnson County were overtaxed by tens of millions of dollars. For now, the ruling effectively rejects the dark store theory big box retailers pursue to lower their tax rates. The theory says that big box stores should be valued as if they were an empty building, not an operating business. The case has much larger implications beyond simply Walmart and Johnson County, because it could determine whether the dark store theory gains a foothold across Kansas. In an unanimous decision, the court said the Kansas Board of Tax Appeals wrongly ruled in Walmart’s favor. The court said the board had disregarded evidence from Johnson County on how to value Walmart’s properties. The court sent the cases back to the Board of Tax Appeals to fully reconsider the county’s evidence. However, it’s possible the board could again rule in Walmart’s favor.
Source: KCUR News
